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Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
Quantifying & Capturing Value In the Age of Healthcare Reform
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Quantifying & Capturing Value In the Age of Healthcare Reform

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The old model of selling purely on clinical benefit in the U.S. healthcare industry is dead. Profound changes are underway in how hospitals and other healthcare providers make purchase decisions for …

The old model of selling purely on clinical benefit in the U.S. healthcare industry is dead. Profound changes are underway in how hospitals and other healthcare providers make purchase decisions for medical devices, services, diagnostics, and pharmaceuticals.

In this half-hour webinar, Christopher Provines describes the dramatic impact that the Accountable Care Act (ACA) will have on all healthcare suppliers. Chris explains how new purchasing practices and business models such as value-based purchasing, bundled payments, Accountable Care Organizations and quality-based reimbursement will change the rules of the game for selling and negotiating.

Learn:

* Tips for how to effectively engage customers in this "new normal" healthcare environment
* Strategies for quantifying the value of your offering and how to connect it to your healthcare customers' business model
* Best practices for how to grow your healthcare business

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  • 1. Copyright © 2013 by LeveragePoint Innovations Inc.No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means —electronic, mechanical, photocopying, recording, or otherwise — without the permission of LeveragePoint Innovations Inc.This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.COMPANY CONFIDENTIALQuantifying and Capturing Valuein the Age of Healthcare ReformMonthly Webinar Series – April 18, 2013
  • 2. 2Sponsored by LeveragePointthe Software Solution for Value-based Pricing
  • 3. 3Today’s PresenterQuantifying and Capturing Value in the Age of Healthcare ReformChris Provines is a healthcare and medical technologyindustry veteran. He has 23-years of experience in variousfunctions, including executive roles at Johnson & Johnsonand Siemens Healthcare. He is a world-leading expert inmedical technology pricing and market access. He is theCEO of Value Vantage Partners, a global consulting andtraining company focused on strategic pricing, value selling,and sales negotiations.Chris is the author of the Strategic Pricing for MedicalTechnologies, and is an award-winning Adjunct Professor atRutgers University Business School where he teaches in theMBA program. He can be reached atchris@valuevantagepartners.com.
  • 4. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved4• Learn about key changes to the US healthcare market• Discuss strategies for quantifying the value of your offering andconnecting it to customers evolving business model• Share what best practices companies are doing to grow in the newnormal4Learning Objectives
  • 5. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved5Shift HappensNewBuyerOldBuyerRelationship driven / lesssophisticated buyersValue & data-driven /professional buyers
  • 6. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved6PhysicianemploymenttrendsPurchasingconsultantsValue basedpurchasingReimbursementcutsDatatransparency /ComparativeeffectivenessIncreasingevidencerequirementsPatientsatisfactionACO’sBundledPayments, Gain-sharingReadmissionpenaltiesCostsQualityPressure onPrices, Value,Utilization &Margins=Key Drivers Will Accelerate the Shift
  • 7. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved7Source: Beckers Hospital Review; April, 20121. Cost containment2. Improve patientquality3. Maintainingreimbursement4. Data connectivity“There is one strategy thatwas almost a near-consensus among thesurveyed hospital executives:Negotiate more aggressivelywith vendors and suppliers”“If suppliers can prove theyhave an immediate impact onpatient outcomes, thatllresonate with the C-suite ofthe hospital.”Top Areas of Focus for Hospital Executives
  • 8. Copyright © 2013 Value Vantage Partners LLC All Rights ReservedPhysiciangain sharingprogramsValue basedpurchasingNew businessmodelsAccountablecareorganizationsRise of theeconomicbuyerHealthcareReformImplications – sales and corporateaccount teams will need to: Interact in a credible way withadministrators on healthcarereform issues Understand the business impact ofproducts, solutions & services Be able to sell the value oftechnology and services to ACOs Be able to sell both clinical andeconomic benefits Deal with more powerful economicbuyers Use value in trades duringnegotiations8Sales Teams Face a Wave of Challenges
  • 9. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved9• Learn about key changes to the US healthcare market• Discuss strategies for quantifying the value of your offering andconnecting it to customers evolving business model• Share what best practices companies are doing to grow in the newnormal9Learning Objectives
  • 10. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved1010Understand Your Value PropositionPatient Provider PhysicianACO/InsurerPsychol-ogicalClinicalEconomicWhere do you haveadvantages?Adapted from: Strategic Pricing for Medical Technologies, Provines (2012)
  • 11. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved11Understanding Economic Value11The big questionsto ask related toyour solution?Who ultimately pays?• Medicare• Medicaid• Commercial• Employer / OtherHow is the provider/physician paid?• Prospective case rate (DRG, APC)• Per diem• Fee for service• Risk based / bundled paymentHow does the buyer evaluate theeconomics of your solution?• Total cost of ownership• Quality incentives / reimbursement• Population vs. clinical event• Risk mitigationAdapted from: Strategic Pricing for Medical Technologies, Provines (2012)
  • 12. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved12“Classic” Examples of Value Management12Cypher Drug-eluting stentOncotype DX,21-genereversetranscriptionassayQuantifyCommunicateCapture• First drug-eluting cardiac stent launched• Substantial investment in clinical & economicdata and reimbursement activities• Priced to “share” value at ~$2,900 per stent;cost-neutral for payer versus bare metal stents• Innovative breast cancer recurrence assay• Test helps to better predict recurrence risk anddirect chemotherapy• Company sponsored comprehensive economicanalysis to quantify value and show savings• Priced at $3,450 at launchAdapted from: Strategic Pricing for Medical Technologies, Provines (2012)
  • 13. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved13You Don’t Need a Blockbuster to Start13CommonchallengeWhat best practices companies do….• Productscame tomarketthrough510K or LabDevelopedTest (LDT)regulatorypath• LittleevidenceexistsPrioritizecriticalproducts;select 1 or 2key solutionsto start withQuantify valueusing singlecenter study;decisionanalytic tool; orapprovedprotocol tostudy customereconomicsDevelopselling tool;train anddeploythrough thesales team1. 2. 3.
  • 14. Copyright © 2013 Value Vantage Partners LLC All Rights ReservedDifferent Elements of Offering14You Need to Think Broadly About Value14• Payment terms• Contract length• Performance requirements• Risk sharing• Service hours• Response time• Shipping terms• Customer support• Training• Etc.• Quality level• Speed• Capacity• Etc.CoreSolutionServicesBusinessTermsEnablers• Procedure kits• Automation• Mapping• Etc.Adapted from: Strategic Pricing for Medical Technologies, Provines (2012)
  • 15. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved15• Learn about key changes to the US healthcare market• Discuss strategies for quantifying the value of your offering andconnecting it to customers evolving business model• Share what best practices companies are doing to grow in the newnormal15Learning Objectives
  • 16. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved1616Betterintegratevalue intoR&DUnbundle &understandvalue ofofferingsQuantifyCommunicateCapture• Implement value into formal stage gate process• Use quantitative techniques to dollarize• Look at value from “buying center” and eachstakeholders’ perspective• Make evidence decisions early in R&D process• Unbundle offering (core solution, enablers, service)• Quantify value of separate components• Use components of offering to “trade” with differentbuyer typesBest Practices for New NormalQuantify Value
  • 17. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved1717Arm salesteam withvaluemessages &toolsEducate salesteam on value& customers’businessQuantifyCommunicateCapture• Provide sales team with quantifiable valuemessages and tools• Align messaging and tools to different buyersand buyers’ payment mechanisms• Many sales teams are responsible forcommunicating clinical and economic value• Educate sales team on the customers’ financialsand business model• Teach sales teams to communicate economicvalue to value analysis committeesBest Practices for New NormalCommunicate Value
  • 18. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved1818Teach salesteam tonegotiate withnew buyersDeveloppopulation andrisk basedcontractingmodelsQuantifyCommunicateCapture• Prepare sales team to deal with moresophisticated professional buyers• Identify standard list of offering trades• Provide guidance on how to trade value with thenew buyers (buying committees, VAC’s, etc.)• Align pricing and contracting strategy withcustomers’ new payment models (ACOs, bundledpayments, etc.)• Be prepared to take on risk when it’s to youradvantageBest Practices for New NormalCapture Value
  • 19. Copyright © 2013 Value Vantage Partners LLC All Rights Reserved19• Healthcare reform and other trends are ushering in major changesfor providers, employers, insurers, and patients• Healthcare suppliers who are prepared for the new normal will be ata significant advantage• The future clearly points to value-based healthcare buyingdecisions – you need to be prepared to win19Conclusion
  • 20. 20Professional Pricing Society Spring Conference• Ed Arnold will be presenting, “Anyone Can Build a ValueModel: Let Me Show You How”• Friday, May 3rd at 1pm PDT
  • 21. 21LeveragePoint framework for Customer ValueReferenceValuePositiveDifferentiationCosts unique todoing businesswith youThe Unique ValueYou Provide theCustomerConfidentialQuantify ValueVisualize Value
  • 22. 22Communicate value with confidence & consistencyPlanningCosts$5.40ReduceTesting$7.36Lostbusiness$3.06Reporting$3.08Integrate$2.88Value Message ValueHigher levels of reliability reduceoperating failures$108,000Streamlined parts inventoryreduces parts carrying costs$320,000Higher output and revenue due toreduced excavator downtime$720,000Fuel efficient engines reduceenergy costs$640,000Engage customers byshowing them how youimpact their bottom-lineConfidential
  • 23. 23Thanks for Watching!sales@leveragepoint.comwww.leveragepoint.com(617) 945-7075Chris Provineschris@valuevantagepartners.com(908) 421-0112

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